819d LLC v. Pcg Construction Group, LLC ( 2021 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
819D LLC,
Plaintiff,
v. Case No. 1:19-cv-00080 (TNM)
POTOMAC CONSTRUCTION GROUP,
LLC,
Defendant.
MEMORANDUM ORDER
Plaintiff 819D LLC (“819D”) moved for default judgment against Defendant Potomac
Construction Group, LLC (“Potomac”). The Court granted the motion as to Potomac’s liability,
but declined to award damages because 819D did not provide sufficient evidence. 819D files a
supplemental statement seeking to prove these damages. Based on the evidence, the Court will
grant 819D $339,384.13 in compensatory damages.
I.
The Court need only briefly recount the facts, which are set out fully in the prior decision.
See 819D LLC v. Potomac Constr. Grp., LLC, No. 1:19-cv-00080 (TNM), 2020 WL 5518215(D.D.C. Sept. 14, 2020) (“819D I”). 819D sued Potomac for failure to perform their contract to
renovate condominiums in Washington, D.C. Id. at *1. 819D alleged that Potomac failed to
complete its work on the condominiums, falsely represented that it secured a performance bond
required for the work, and failed to use payments from 819D to properly pay subcontractors. Id.
Potomac never responded to the complaint. Id. So 819D sought default judgment against
Potomac under Federal Rule of Civil Procedure 55. Id. at *2.
The Court partially granted 819D’s default judgment motion. The Court found the
allegations sufficient to establish Potomac’s liability for all counts except punitive damages. Id.
at *2–3. But the Court denied without prejudice the damages sought because 819D failed to
provide “sufficient information for the Court to make the necessary determination on the amount
of damages owed.” Id. at *4 (cleaned up). The Court allowed 819D to supplement its motion
with “another submission proving its entitlement to the requested amount of compensatory
damages.” Id. at *5.
819D timely filed its supplemental submission on damages. See Pl.’s Suppl. Statement in
Supp. Default J. Damages (“Pl.’s Statement”), ECF No. 31.
II.
For default judgments, courts make an “independent determination of the sum to be
awarded.” Int’l Painters & Allied Trades Indus. Pension Fund v. R.W. Amrine Drywall Co., 239
F. Supp. 2d 26, 30 (D.D.C. 2002). The moving party “must prove its entitlement to the amount
of monetary damages requested using detailed affidavits or documentary evidence on which the
court may rely.” Boland v. Providence Constr. Corp., 304 F.R.D. 31, 36 (D.D.C. 2014) (cleaned
up). And it must prove “these damages to a reasonable certainty.” Boland v. Elite Terrazzo
Flooring, 763 F. Supp. 2d 64, 68 (D.D.C. 2011).
2
III.
819D seeks these damages: $36,993.27 for costs incurred to perform work assigned to
Potomac, Pl.’s Statement at 1; $56,004.17, which represents the sum Potomac requested for
premium payments on the performance bond it never obtained, id. at 2; $308,395.52 in payments
to Potomac based on fraudulent subcontractor lien releases, id. at 3; $365,016.00 to recover the
statutory warranty bond that the District of Columbia will not release, id.; $372,975.36, which
represents Potomac’s profits on the condominiums project, id. at 3–4; and $27,465.00 in
attorney’s fees and costs, id. at 4. 1 The Court will partially award these damages.
First, 819D claims $36,993.27 in damages “to have work performed that should have
been done by [Potomac] at no cost under its warranty obligations” and “to pay [Potomac] for
work that [Potomac] would not perform without payment.” Id. at 1–2; see also Aff. Supp.
Default J. (“Rubin Aff.”) ¶ 9, ECF No. 31-1 (“819D incurred damages in the amount of
$36,993.27 to pay for the cost to perform contract that [Potomac] had left incomplete and correct
defective contract work installed by [Potomac].”). Such damages are recoverable here because
they “arise directly from the breach itself.” Mercer Mgmt. Consulting, Inc. v. Wilde, 920 F.
Supp. 219, 238 (D.D.C. 1996) (cleaned up). 819D, however, only proves some of these
damages.
As support, 819D offers a list of payments made to third-party vendors, which provides
the date, third-party name, payment amount, and check number for most payments. 2 See Pl.’s
Statement Ex. 1, ECF No. 31-2. But the Court can only confirm some of these payments. Id.Ex. 2, ECF No. 31-3. 819D submits no proof that it paid $29,971.04 to Potomac or $635.00 to
1
All page citations are to the page numbers that the CM/ECF system generates.
2
Other payments are listed as “Reimbursement” with no check number or have no designation.
Pl.’s Statement Ex. 1, ECF No. 31-2.
3
S.P.D. Company, although both payments are included on the list. Id. Exs. 1, 2. Payments the
Court can confirm total $4,955.48. 3 Id. 819D can recover this sum. The Court, however,
declines to award the remaining amount based only on 819D’s internal list. 4 See Mercer Mgmt.
Consulting, 920 F. Supp. at 238 (“[A] plaintiff must provide a reasonable basis upon which
damages may be estimated.”).
Second, 819D asks for $50,285.00, which represents payments to Potomac based on its
false representations that it paid premiums on a performance bond for the condominiums project.
Pl.’s Statement at 2; see also Rubin Aff. ¶ 11. 819D also seeks $5,719.17 it paid in interest on a
loan used to pay Potomac. Id. The Court finds that these payments were “direct consequences”
of Potomac’s fraud and thus are recoverable. Naartex Consulting Corp. v. Watt, 722 F.2d 779,
793 (D.C. Cir. 1983). To support these damages, 819D submits Potomac’s application for
payment to 819D listing the $50,285.00 in purported premium payments. See Pl.’s Statement
Ex. 3 at 3, ECF No. 31-4; see also id. Ex. 4, ECF No. 31-5 (listing bond payment as $50,285.00).
819D confirms that it paid Potomac based on this application. Id. Ex. 5, ECF No. 31-6. And
819D provides the calculation for the interest it paid. Id. Ex. 6, ECF No. 31-7. Based on this
evidence, 819D can recoup the $56,004.17.
Third, 819D seeks to recover $308,395.52 it paid Potomac based on “forged and
fraudulent subcontractor lien releases.” Pl.’s Statement at 2–3; see also Rubin Aff. ¶ 13.
3
There is a discrepancy between the amount noted for Check 102 in the list of payments
($1,368.28) and the amount provided on the copy of Check 102 ($1,315.98). The Court uses the
amount on the check to calculate the damages.
4
Indeed, some third-parties included on 819D’s list do not match the entity provided on the
checks. Compare Pl.’s Statement Ex. 1 (listing Check 115 as payment to John Morris and
Samantha Novick totaling $1,368.50), with id. Ex. 2 at 8 (Copy of Check 115 showing Canal
View Holdings LLC as the entity to receive this amount).
4
Potomac would not have received the payments without these false representations. See Pl.’s
Statement Ex. 8 § 12, ECF No. 31-9. As evidence, 819D presents Potomac’s four payment
applications requesting: $128,212.42, $76,140.44, $96,507.50, and $29,971.04, respectively. 5
See id. Ex. 7, ECF No. 31-8. But 819D confirms payment for only the first three applications.
Id. at 7–10 (showing wire transfers and checks in the amounts requested in Potomac’s first three
applications). There is no proof, however, that 819D paid Potomac for the final application. The
Court therefore will award only the amount it can confirm—$278,424.48.
Relatedly, 819D asks for $372,975.36, which represents Potomac’s profits for the
condominiums project. Pl.’s Statement at 3; id. Ex. 9 at 2, ECF No. 31-10; see also Rubin Aff.
¶ 13. The Court, however, remains unconvinced that “[819D] should still recover this full
amount.” 819D I, 2020 WL 5518215, at *4. 819D fails again to show why Potomac should not
receive any fee for the work it performed on the project. See id. (“819D does not allege that
Potomac performed no work on the project, only that the work was defective and incomplete.”).
819D will already recoup some payments made to Potomac, which seemingly comprise a portion
of the profits 819D seeks to recover here. 819D cannot double-dip. See EEOC v. Waffle House,
Inc., 534 U.S. 279, 297 (2002) (“[I]t goes without saying that the courts can and should preclude
double recovery by an individual.” (cleaned up)). Since 819D still fails to “prove its entitlement
to the amount of damages requested,” the Court will not award them. Boland, 304 F.R.D. at 36.
Next, 819D renews its request for $365,016.00 to recover the structural warranty bond for
the condominiums project. Pl.’s Statement at 3. 819D explains that the District of Columbia
5
The Court notes that the sum sought in Potomac’s first payment application ($128,212.42) is
greater than the amount 819D seeks to recover ($105,776.54). See Pl.’s Statement Ex. 7 at 1,
ECF No. 31-8. The Court grants only the amount for which 819D can confirm payment, which
is $105,776.54. Id. at 7.
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will not release the bond because there is ongoing litigation against 819D and others “alleging, in
part, a statutory warranty claim.” Id.; see also Rubin Aff. ¶ 16 (“As a direct result of
[Potomac’s] breach of its warranty obligations, 819D has not been able to obtain the release of a
structural warranty bond which the District of Columbia continues to hold in the amount of
$365,016.00.”). But missing still is any evidence to “confirm that a structural warranty bond
exists in this amount, or that the District of Columbia refuses to release that bond.” 819D I, 2020
WL 5518215, at *4. 819D also fails (again) “to justify why it is entitled to these compensatory
damages and the declaratory relief sought.” Id. Nor has 819D foreclosed recovering this bond
from the District of Columbia in the future, after resolving the pending litigation. See D.C. Code
§ 42-1903.16(e)(2) (requiring that the warranty bond be maintained “until the claims have been
finally resolved”). As before, the record does not support these damages. Accord GAG Enters.,
Inc. v. Rayford, 312 F.R.D. 230, 235 (D.D.C. 2015) (“Plaintiff does not state a basis as to why
Defendant owes Plaintiff these costs.”).
Finally, 819D seeks $27,465.00 in attorney’s fees. Pl.’s Statement at 4. Whether to grant
these fees is a “judgment call” requiring courts to determine whether the fees are “reasonable.”
Combs v. Coal & Min. Mgmt. Servs., Inc., 105 F.R.D. 472, 475 (D.D.C. 1984) (cleaned up).
“However, absent a statutory or contractual entitlement to attorney’s fees, the so-called
American Rule generally precludes parties from obtaining fees after prevailing in litigation.”
Johnson-Lancaster & Assocs., Inc. v. TB Ballston, LLC, No. 20-cv-1565 (CRC), 2020 WL
7481040, at *4 (D.D.C. Dec. 18, 2020). 819D identifies no statute or contractual provision that
entitles it to recover attorney’s fees here. Indeed, the construction contract only addresses
attorney’s fees that Potomac can recover and excludes any such fees arising from a dispute with
819D. See Pl.’s Statement Ex. 8 § 7.6.8 (allowing Potomac to obtain, with 819D’s prior
6
approval, attorney’s fees reasonably incurred in performance of work “other than those arising
from disputes between the Owner [819D] and Contractor [Potomac]”). The Court is sympathetic
to the attorneys’ efforts here. See Pl.’s Ex. 10, ECF No. 31-11. But the fees are not recoverable.
See Johnson-Lancaster & Assocs., 2020 WL 7481040, at *4 (declining to award attorney’s fees
in default judgment because plaintiff cited no provision entitling it to recover these fees).
IV.
For these reasons, it is hereby ORDERED that JUDGMENT IS ENTERED against
Defendant in the amount of $339,384.13. It is further DECLARED that Defendant’s warranty
obligations remain valid and that Defendant must continue to act in accordance with these
obligations. 6 The Clerk of Court is directed to close this case.
SO ORDERED. 2021.02.02
17:07:37 -05'00'
Dated: February 2, 2021 TREVOR N. McFADDEN, U.S.D.J.
6
819D asked the Court to confirm the declaratory relief granted in the prior memorandum order.
See Pl.’s Statement at 4.
7